Peabody Energy Corporation (BTU)

Electric utilities from Minnesota to Texas are trying to pressure Berkshire Hathaway's (BRK.A, [BRK.B]]) BNSF Railway to speed up deliveries of coal on its congested tracks before the worst winter weather hits.

One group of utilities has petitioned federal regulators to impose a timetable on BNSF to add workers and improve tracks leading east from coal fields in Wyoming; some of the group’s utilities depend on BNSF, one of the largest shippers of coal from the West, for their coal supply, and they say they do not have an alternative.

Xcel Energy (NYSE:XEL), which owns utilities in eight states, says all its coal plants served by BNSF have less than 30 days’ worth of coal; Allete’s (NYSE:ALE) Minnesota Power temporarily shut two smaller coal plants in September to conserve coal for its large coal plant in Cohasset.

Coal producers also are struggling to cope with the rail service problems; Peabody Energy (NYSE:BTU) says coal shipments from its Western operations, including Wyoming mines that supply power plants in Minnesota, fell 2% in Q3 because customers could not find enough rail capacity.

Ethanol and other biofuel groups are declaring victory, as the EPA today said a decision to finalize blending requirements for 2014 - first proposed more than a year ago - has been delayed.

The delay gives hope to ethanol producers that the EPA will rethink how it proposes the annual biofuels levels; the draft 2014 biofuels levels were much lower than the ethanol industry wanted.

Oil company lobbyists opposed to the law say the idea of setting a retroactive quota shows the EPA is incapable of managing the program; the American Fuel & Petrochemical Manufacturers, which represents energy companies, plans to sue the EPA for failing to issue the 2014 requirements.

Deutsche Bank says the move is an important signal from the world’s largest producer of seaborne thermal coal: “Taking 5M tonnes out of the 1.1B [a year] seaborne market is a relatively small starting point, but may mark the start of more to come."

But other analysts say it is no sure thing that Glencore’s move would be copied by others or lead to permanent mine closures; unlike some rivals, Glencore has less exposure to "take or pay” contacts which oblige miners to pay charges of up to $25/metric ton to use rail and port.

The big Republican victory in last week's congressional elections is raising coal industry hopes for a rollback of the Obama administration’s plan to cut emissions from coal-fired power plants, according to Peabody Energy (NYSE:BTU) CEO Greg Boyce.

Boyce says BTU advocates building “supercritical” power plants worldwide that pollute less per unit of power produced than traditional plants, but he says the EPA's provisions requiring them also to be fitted with technology for carbon capture and storage technology is impractical and potentially very costly.

Shares in BTU, the largest U.S. coal producer, have jumped 13% since last Tuesday after hitting 10-year lows a month ago.

Peabody Energy (NYSE:BTU) CEO Greg Boyce lashes out at climate change activists, arguing that even as coal is the biggest source of carbon emissions, divesting from fossil fuels is “misguided and anti-poor."

“It’s pretty strange that, globally, not only the UN, but developed country leaders are spending so much time on, quote, climate change,” Boyce says. "They aren’t focusing on how you eliminate poverty, eliminate energy poverty, and start driving global economic activity.”

Boyce’s position is drawing heavy criticism at a time when the UN warned recently that humans must act to cut carbon emissions to prevent widespread harm from rising global temperatures.

“The fundamental case for coal is strengthening but requires several years of patience," and coal miners (NYSEARCA:KOL) still pose too much short-term risk for investors, J.P. Morgan analyst John Bridges says.

The coal sector is "very much a weather trade" which is sensitive to this winter’s temperatures, Bridges says, "consequently, without another particularly cold winter or a direct cyclonic hit on Australia’s coking coal mines, coal prices and thus the coal equities are likely to remain volatile through the 2014-15 winter."

Coal stocks (NYSEARCA:KOL) are rallying in the hope that the new balance of power in D.C. can at least halt what the companies view as an attack on their livelihood.

Strategas' Daniel Clifton thinks there’s a good chance the new Congress will “slow down EPA rules on coal” which have limited its use by utilities, and any approval for the Keystone XL pipeline would mean more rail transport for coal, a problem Peabody Energy (BTU+4.4%) has said was limiting its coal sales.

"The global seaborne metallurgical coal market has shown no meaningful improvement over the last several months," ANR said, expecting more production cuts "as current prices do not allow a return for many of the global producers."

ANR gloomy outlook for the coal markets (NYSEARCA:KOL) contrasts with that of some competitors including Peabody Energy (NYSE:BTU), which said last week that the industry may be poised to rebound from its worst downturn in decades.

Stifel analysts think CLF is making progres but worry about its Bloom Lake project; CLF was able to show better than expected cost controls across all reported segments in Q3, but a concern is the rail take-or-pay contract which would require even bigger cash payouts in 2015 if Phase 1 at Bloom Lake is shutdown.

Investors see that the worst may be over for the coal market after a series of output cuts around the world, according to Peabody Energy (BTU-3.3%) Chairman and CEO Greg Boyce, pointing out that coal pricing has been essentially flat for about nine months.

"There’s going to be a long lag where you’ve got less supply than demand,” Boyce says, and "that’s going to have a strong, strong pull for the sector."

The CEO says catalysts coal investors are anticipating include rising Chinese demand and an improvement in U.S. railroad capacity to deliver from mining regions such as Wyoming’s Powder River Basin, where BTU produces most of its thermal coal.

Peabody Energy (NYSE:BTU) +1.1% premarket after posting a lighter than expected Q3 loss, as it controlled costs at its mines in Australia and helped lessen the impact of lower coal prices.

BTU says its Q3 U.S. mining revenues fell 2.7% to $1.02B due to lower volumes and reduced Midwestern revenues per ton, while revenue/ton increased slightly to $21.24; Australian revenues slipped 4.1% to $676M as higher volumes partly offset a 13% reduction in revenues/ton.